Potential negative issues regarding corporate earnings and cash flow could be spotted sooner with increased disclosure and transparency of financial statements, a new report shows.

Fitch Ratings recently released its third annual review of corporate accounting issues. The report takes into account a number of recent accounting standards changes, including guidance for goodwill; pension, tax and convergence issues; and comprehensive income presentation changes. The report also identifies "red flag" practices that could indicate aggressive accounting practices, as well as changes resulting from enhanced footnote disclosures for multi-employer pensions and fair value.

"The most informative recent enhancements to footnote disclosure relate to employers' financial obligations to multi-employer pension and postretirement plans," according to the report. "The new disclosures go a long way toward revealing better estimates of a company's share of its MEPP liabilities and potential impact on future cash flow."

In its most recent corporate report, Prudential Financial claimed losses of roughly $988 million, which it attributed to changes in accounting standards. The company retroactively adopted a Financial Accounting Standards Board guideline governing the deferral of new or renewed contract costs.